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Liability Auto Insurance

By Compuquotes Team on March 27th, 2008
Auto Insurance

The Low Coverage Policy With Low Monthly Payments
You've got a car, you've got a license, but there's just one thing stopping you from hitting the road (at least it should stop you). You need insurance. And liability auto insurance is the least expensive kind of policy. Liability covers only one thing: the damage you do to another person or their car and property in an accident. And even then, only when you're at fault for the accident.

Liability Auto Insurance Is a Minimum Requirement

Anyone driving is required to carry a minimum of liability auto insurance. There are other kinds of insurance that go beyond this. Collision auto insurance will cover your own car, even if you're at fault for the accident. Comprehensive auto insurance covers just about everything, from theft to vandalism and natural disaster.

Not only do states require all drivers to have liability insurance, but each state also specifies a minimum amount for the coverage. Most of the states also require you to add extra coverage for yourself in the event that you're hit by an uninsured driver.

The state minimum amounts for a liability auto insurance policy are divided into two basic sections. The first one covers bodily injury, and the average minimum is $40,000. The second part covers property damage and the average minimum liability amount is $15,000.

Minimum Liability Auto Insurance Is Not Enough
Insurance agents generally advise clients to cover themselves for more that the state minimum amounts. After all, an auto accident can cause serious damage. If medical bills exceed the amount of bodily injury coverage, you could open yourself up to lawsuits. The courts are sometimes very generous when awarding car crash victims. If your liability auto insurance doesn't cover the amount awarded, all of your capital is in jeopardy.

If you don't have the amount of money to cover the amount awarded in the accident (people rarely do), the courts could order an amount of money to be taken from your paycheck until you've paid the debt, plus interest. This could take many years or even a lifetime. It's better to spend the extra money now for more coverage in your liability auto insurance policy, and avoid huge losses in the future.

Sometimes, you'll actually have to have more than liability auto insurance. For example, if you have to finance a car, the banks and loan institutions require comprehensive auto insurance. They're lending money for a car, and want to protect their investment.

This leaves you something to consider if you look into buying a car on credit. Even if you get excellent rates, you'll want to point your sites towards a car that costs LESS than you can afford, because you have to take into account the higher insurance premiums. And sometimes (especially if you're buying a car more than 5 years old) the insurance premiums cost more than the car is worth.

When you pay for a car upfront without financing, and the car is only worth liability auto insurance, you have the option to only purchase liability insurance.

Liability Auto Insurance Costs

So how much does it cost to get a liability auto insurance policy? That depends on all kinds of variables. The insurance companies do a lot of research to figure out risk factors for individuals. They look at everything from age and sex to the type of car you want to insure. And as mentioned earlier, you can get adjust your coverage amounts with liability auto insurance. This will also affect your premiums.

Prices will also vary from company to company, so get several quotes before deciding on a specific policy. The online presence of auto insurance companies makes research much easier than it used to be. You can go to a single website, enter your information once, and get several liability auto insurance quotes at once.

After you've got your estimates, do some research about the companies. Find out from friends and family how easy it is to deal with them, and whether or not their rates skyrocket after a single claim.

Liability auto insurance might not be everything you want out of a policy, but it's cheap and easy to purchase. Unless you're buying a car worth a lot of money, it'll probably be enough to cover your greatest concerns.

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